Binance has been described as a ‘Crypto-Wash Empire’ in a lawsuit over money laundering activities
Binance and its former CEO, Changpeng Zhao, face a new class-action lawsuit in Seattle federal court alleging harm to consumers as a result of their money laundering practices. The suit alleges that the defendants, famous actors, made large amounts of income by keeping their money undisclosed.
The plaintiff highlighted the intentional violations of Binance
“The defendants knowingly failed to register as financial services businesses and willfully failed to comply with the Bank Secrecy Act,” the plaintiffs said in the lawsuit filed Aug. 16 in the US District Court for the Western District of Seattle, Washington. and maintaining an effective anti-money laundering program, ignoring critical KYC laws and violating U.S. economic sanctions in a deliberate and calculated effort to profit from the U.S. market.
‘Crypto-Wash Empire'
The filing also states that the defendants' willful disregard for these important laws and regulations has made Binance.com a magnet and hub for criminals, terrorists, and other bad actors, and that Binance.com is a preferred “disposal driver.” A lot of bad actors. The indictment describes Binance as a “Crypto-Wash Empire”.
The defendants argued that a key feature of crypto transactions is a permanent record of transactions on the blockchain, which makes them “permanently and precisely traceable.” “So without a place like Binance.com to launder crypto, there's a risk that if a bad actor steals someone else's crypto, authorities can track their steps on the blockchain and eventually track them down.”
But can the allegations be proven?
Bill Hughes, a lawyer at Consensus, said the latest class action lawsuit is a ‘natural, predictable civil action' seeking to gain leverage over government lawsuits and enforcement actions. However, he said he doubted whether the prosecution could prove these allegations.
He went on to emphasize that “if this issue even goes into discovery and pre-trial testing, blockchain analytics itself and the effectiveness of on-chain asset recovery will be put to the test.”
